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Two weeks after GST rollout, restaurants record drop in footfalls

IANS | Chandigarh |

With the eating out at an air-conditioned (AC) restaurant becoming expensive due to the Goods and Services Tax (GST) regime coming into effect on 1 July, there is about 50 per cent drop in footfalls at various eating joints in the city.

According to restaurant owners in the City Beautiful, there is confusion over the tax rate to be charged from customers under the GST regime and customers fear they will have to pay more tax than earlier at eating joints or restaurants.

''It will take time for the people of the city come to terms with the new tax regime. Many of them have cut down their visits to our restaurant. People are assuming that it will be costly for them and so they are avoiding visit us for a lunch or dinner,'' said the owner of the Chaugan restaurant at Sector-22, Avinash Sandhyana.

The number of customers in the city restaurants has reduced to a significant number in the first ten days post GST. A resident of Mohali, Ankusha Verma said that going out with her family on dinner once a week at any city restaurant was a routine, but now she thinks twice before stepping out of her house.

''There is an overall downfall in the whole market as the consumers in every section have narrowed. The tax slab is 12 per cent for us now, which is 0.5 per cent less than before. We are hoping that in the coming festival season the number of purchasers will increase,'' said Raghuvir Singh, the Manager of ML Departmental Stores (Hot Stoppers).

Owner of Muskan Restaurant Sector17, Vijay Uppal said that the tax percentage charged is uncertain as previously he came under tax slab of 5 per cent and now the information showed him under tax slab of 12 per cent which is causing confusion.

Another owner of a restaurant in Sector-22 said that now he is coming under 12 per cent tax slab, he cannot charge the customers for extra money. "The various tax slabs are growing arduous for the businessmen and is harming our business,'' he said.

Due to the unclear tax rates under GST, many restaurant owners are avoiding to issue printed bills as they are unsure about the same.
Some in the restaurant business, however, claim no GST effect on their business.

A senior staffer at Hot Millions Restaurant said they are coming under the tax slab of 18 per cent which is quite neutral and the consumers have neither decreased or increased in the number.